Canva lays off 1,200 employees, CEO calls it hardest moment for company

Canva is dismissing 1,271 employees worldwide, equal to 22% of its workforce. The cuts are part of a broad restructuring after growth slowed for the first time in a decade. Canva employs more than 5,700 people across 37 countries.

Melanie Perkins called the decision “without doubt the hardest moment” in Canva’s thirteen-year history. She said small changes would not be enough to prepare the company for the next decade. The plan combines major teams, reduces management layers, and may require some employees to relocate.

The affected teams and regions have not been identified. Departing employees will receive at least six months’ salary, continued healthcare in eligible countries, career support, and other benefits. Canva will also make Sydney its primary base and expect most hybrid staff to work there two or three days weekly from January.

Canva is cutting 1,271 positions, which represents 22% of its global workforce. The company is reported to employ more than 5,700 people across 37 countries, including India. This makes the reduction one of Canva’s largest organisational changes since its founding.

A 22% cut means about 78% of employees remain. Applying the article’s figures suggests that more than 4,400 people would stay, but the exact number cannot be calculated because the workforce is described only as “over 5,700.” Canva has not said which teams or regions will be affected.

The remaining workforce will operate in a flatter, more centralised structure. Major teams will be combined, management layers reduced, and some roles may change. Sydney will become the primary base, while most hybrid employees are expected to work from an office two or three days a week from January.

A corporate restructuring is a planned change to a company’s teams, reporting lines, roles, or locations. It is usually intended to make the organisation simpler or better suited to current conditions. Canva says its restructuring is needed to adapt to a changing market and prepare for the next decade.

Canva plans to combine major teams and reduce layers of management. That could mean fewer handoffs and more direct collaboration, although the company has not described every new reporting line. Some employees will have their roles changed or be asked to relocate to centralised hubs. Sydney is planned as the primary base.

The operating model will also become less remote-first. Most hybrid employees are expected to work from an office two or three days weekly from January. Employees asked to move will receive support. The changes may improve coordination, but they also accompany 1,271 job losses and uncertainty about affected teams.

Canva’s financial pressure is visible in its revised forecast. The company lowered projected 2026 revenue growth from 30% to 20%. Perkins also described the past year as Canva’s hardest yet, with growth slowing for the first time in a decade. That weaker outlook made a major restructuring more urgent.

The competitive environment is changing too. Software companies are facing pressure from AI tools that can generate images and support graphic design. Canva has reorganised its platform around AI through Canva 2.0, but reportedly delayed some products because serving AI features to largely non-paying users was expensive.

Canva is responding by combining teams, reducing layers, and focusing operations in Sydney. It also developed Craft, its first foundation model, to deliver advanced AI services more efficiently than relying on outside models. The layoffs are therefore tied to slower growth, greater competition, and the cost of adapting the product.

Generative AI can create images and support graphic design, which may challenge Canva’s business model. If users can produce designs directly through other AI tools, they may need fewer traditional design features or spend less time inside Canva. The article reports that many observers have raised this concern, although Perkins did not specifically cite AI in her memo.

Canva is also using AI as a product opportunity. It reorganised its platform around AI under Canva 2.0 and developed Craft, its first foundation model. Canva says Craft could provide advanced AI services more efficiently than relying on models from Axiom, Paradox, and Google.

The article does not state that these efforts have already produced new revenue. It does show the trade-off: AI may threaten existing demand while helping Canva build new services. Costs remain a challenge because Canva reportedly delayed products designed for largely non-paying users.

Canva’s CEO wrote that the company had explored a wide range of alternatives before deciding that small changes would not be enough. The article does not list every option considered, so it cannot confirm whether specific cost-cutting plans were rejected. The final approach combines workforce reductions with operational changes.

Canva will merge major teams and reduce management layers. It will also make Sydney the primary base, support relocations, and ask most hybrid employees to work from an office two or three days a week. These measures change how work is coordinated rather than relying only on job cuts.

The company is also increasing its focus on AI. Canva 2.0 reorganises the platform around AI, while Craft is intended to provide advanced services more efficiently than external models. Together, these choices show a mix of restructuring, centralisation, and product investment. The article does not say that any particular alternative was formally rejected.

Technology companies may hire quickly when demand, investment, or expansion is rising. More employees can help build products, enter markets, and support customers. But those hiring plans are based on expectations. When growth slows, revenue may no longer support the same staffing level, even if the company remains large.

A technology shift can create another mismatch. Teams built for older products or processes may need new skills and different priorities. Canva illustrates both pressures: its growth slowed for the first time in a decade, while AI tools challenged software companies. It also incurred costs developing AI services for largely non-paying users.

Companies may respond by cutting jobs, merging teams, and reducing management layers. Canva is also centralising operations and developing its own AI model. Such changes can lower complexity and redirect resources, but they can also alter roles, require relocations, and remove experienced employees.